I hope you haven't been following the pundits advice and loaded up on Chinese shares.
Oh and the Yuan to be the next reserve currency? Give me a break.
June 27 (Bloomberg) -- China’s first audit of local government debt found liabilities of 10.7 trillion yuan ($1.7 trillion) and warned of repayment risks, including reliance on land sales and investment in stock markets.
A total of 148 financing vehicles set up by local governments already had more than 8 billion yuan in overdue debt, while more than 5 percent of such companies used new bank borrowing to repay existing loans, according to an audit report posted on the National Audit Office’s Web site.
Local governments, barred from selling bonds or borrowing directly from banks, had set up 6,576 financing vehicles by the end of 2010 to raise money, the audit showed.
Governments from 12 provinces, 307 cities and 1,131 townships have pledged to use revenues from land sales to repay a combined outstanding debt of 2.55 trillion yuan. More than 35 billion yuan of money borrowed by local governments went into the stock and property markets or prohibited projects, the report showed.
China found five of the country’s commercial banks have issued 58 billion yuan of loans that violated loan rules, Liu said in his speech. The audit found 4,407 low-income rental apartments that had been used in violation of rental or sales rules in 2010. A total of 4,247 apartments have been allocated to unqualified families, it said.